3 Steps To Increasing Your Income

Most accountants, financial planners and wealth-building experts agree that there are really only three ways to increase your income. You can either:

1. Increase your revenue (make more money)

or

2. Decrease your expenses (spend less money)

or

3. Do both 1 and 2

However, what is not so obvious are the words that should always follow these "income-increasing" statements. Accountants, financial planners and wealth-building experts are often so close to these principles that they assume we all know them to be true. They also tend to believe that everyone has the necessary discipline and patience to automatically make them happen. Here are the reality-based revised versions of the statements that, although might not be as easy to relate to, really make more sense and, if you follow them to the letter, will help keep you on track. If you want to increase your income you must either:

1. Increase your revenue (and at the same time keep your expenses the same or less than before)

or

2. Decrease your expenses (and at the same time maintain or increase your revenue)

or

3. Do both 1 and 2

One version of Parkinson's Law is that "expenses rise to meet income." Put another way: "The more you make, the more you spend." If you truly want to increase your income, it is important to maintain the same, or even a scaled-down, style of living for a period of time.

For example, if you make $45,000.00 per year and receive an annual raise of 10%, you gain an additional $4500.00 per year ($375.00 per month) for a new total of $49,500.00. It is awfully tempting to spend this extra $4500.00, rather than invest or save it. In addition, it is easy to talk yourself into "upgrading" your lifestyle by trading up for a more expensive car, taking an unplanned vacation, or some other "deserved" reward. After all, you just "increased" your income by $375.00 per month. Right? Wrong - if you spend it!

If you spend the extra money, you have not really increased your income at all. In fact, if you spend it and then take added taxes and other liabilities into account, you may actually have less income than you had before the raise! Weird, huh?

The point here is that it's not just about making more money. It's about what you do with the extra money that determines whether or not you have truly increased your income. The reverse is also true. Let's say that instead of the 10% raise, you get no raise at all. But, you decide to "raise" your income by cutting expenses. If you find a way to cut your expenses by 10%, you actually are gaining over $375.00 per month. If you are able to cut your expenses by $4500.00 per year, in reality, you just increased your annual income by 10%. Weird again, but true.

Your desire, ability and willingness to both cut expenses and increase revenue will determine how fast and how much your income will jump. It's a powerful combination, and this is the "secret" that most wealthy people use all the time.

Dr. Dan Strakal has been an expert on the changing workplace, job transition, and career development for nearly 20 years. He acts as a trusted client advisor and consultant within the corporate sector, government agencies, civic organizations, small businesses, and educational institutions. He also provides business, executive and career consulting, coaching and workshops for individual clients and is the coauthor of and contributor to two books, Better Job Search in 3 Easy Steps and Better Job Skills in 3 Easy Steps. Dan is often called upon by the national and international media as an expert and has appeared in The Wall Street Journal, Self Magazine, SmartMoney.com, Computerworld, Diversity Inc. Magazine, Chief Information Officer (Australia's Magazine for Information Executives), the Radio America Program: News You Can Use, KBS Radio Canada and many other media outlets. He is on the Board of Directors of the Career Planning and Adult Development Network and is a Platinum Member of the Career Masters Institute. More info at http://www.capable-consulting.com

Five cardinal rules for managing your moneyNew Jersey HeraldThe result is that they live "paycheck to paycheck," have limited financial resources in the event of emergencies, and lose out on years of wealth-building opportunities. Overcoming these problems is not impossible but it does require a change in ...

People's capitalism for public transportationAspen TimesI spoke about his broad-based wealth building idea at a Colorado General Assemby Senate Finance Committee hearing and at RFTA and other government meetings in the Roaring Fork Valley. Rockefeller's "people's capitalism" is about government ...and more »

In DC Region, Resistance Grows to HQ2Next CityBut its members are looking at community wealth-building strategies with real-world examples, for example, Richmond, Virginia's Office of Community Wealth Building, which connects residents with smaller enterprises such as Stone Brewing. (Next City has ...

Learn What Wall Street Doesn't Want Investors To KnowPR Newswire (press release)LOS ANGELES, Aug. 14, 2018 /PRNewswire/ -- When you think about building wealth, most people may think about investing in stocks, real estate, or bonds – but what about precious metals? Over the past decade, Central Banks have created massive ...and more »

RELATED ARTICLESHow To Be A Millionaire - The Top Secret Of Wealth Creation
Have you any idea how many people search Google every single day for terms such as, "make fast money" or "get rich quick"?Intelligent, motivated people, just like you and me? It's veritably FRIGHTENING.Some do it for a laugh.
21 Secrets of Self Made Millionaires
Self-Made Millionaires are not smarter or better than you. They have just discovered these secrets and used them to become wealthy.
Have You Ever Had That Feeling?
Have you ever had that feeling where you could not wait to go to sleep because you were so anxious about tomorrow? You were so excited and your heart was beating so fast that as much as you tried you could not go to sleep? So you just lay in bed imagining what you would do the next day. Imagine that you were thinking about what you would do with the money you've made that day and how much more you will make tomorrow.
Top 7 Ways To Get Rich
Want to be one of the lucky ones on the road to riches, want to be on the freeway to financial freedom, on your way to wealth?Here are the top 7 roads to riches, the top 7 easiest and fastest ways to acquire wealth ..
Self Improvement and Financial Security for the Future
Any successful person, or any anyone interested in self improvement and making a better life for themselves must be prepared to take responsibility for every aspect of their lives and their future.To many people, financial planning may well be one of the most uninspiring of all subjects.
Plan For Wealth
One very important wealth creating habit is to set up a concrete plan that you can actually follow. You see, wealth takes planning, and is usually the result of taking a set of orderly, progressive steps from where you are now to where you want to be financially.
Why Get Rich When You Can Be Wealthy?
"Any fool can rich, the wise get wealthy." Chris WidenerGetting rich is the main goal for a lot of people.
Residual Income - 3 Ideas for Long Term Profits
A residual income is one that comes in no matter what--even when you are not working (or can't work.) It's something all of us will someday want and possibly need.
How to Save Money and Take the Vacation You Always Wanted
Many people don't realize how much money they spend on convenience and boy does it add up. I am going to share some of my frugal and practical tips of how to save money for the vacation you always wanted.
How Should I Create Passive Income?
If you're wondering where to create passive income, then you are likely not alone. There are hundreds of different ways, however, so you're sure to find something that will work for you.
Trustees: Who Can You Trust?
Early in my legal career I represented two young women in their
early 20s.Their mother had been killed in a car accident when they were
infants.
What Do You Mean By Diversity?
The word 'diversity' is a unique one. It can represent many things, depending upon its context.
Learn How to Bank Like a Banker
The business of banking has changed dramatically over the last decade. Because the cost of doing business the old-fashioned way is no longer effective, banks are interested in changing their customers' behavior by encouraging electronic banking alternatives whenever possible.
Wealth Management, Wealth Protection, and Tax Planning
U.S.
Personal Finance Rules to Building Wealth
Key 1 Pay your self firstkey 2 Saving is not a punishment. Its making choices about how you'll use your money.
Pennies From Heaven
I want to share an experience I had in common as a child with Dr. Wayne Dyer, author of the bestselling book, The Power of Intention.
Controversial Wealth Audit Reveals Over 90 Percent of Us Could End Up Working Forever...Are You One
Results from a new tool developed by UK based
firm, Lean Marketing, confirm a worrying trend.When it comes to making money,
most of us simply don't have a clue.
Turbocharged Financial Planning
Financial planning is an ongoing process individuals and businesses should implement by organizing all aspects of their finances. This will assist in identifying financial goals, providing a comprehensive written Financial Plan, and implementing the plan in accordance with the objectives that
are most important to you.
A New Paradigm Shift In Earthly Wealth
Hello,If you dont understand this yet, or have not heard of opportunity investment, you are about to venture into a new life for yourself and your family.My own fiscal transformation occurred several years ago, yet its not over yet, I've just begun.
How Much Do You Need To Earn Per Hour To Achieve Your Yearly Financial Goals
Have you ever asked yourself what your highest income producing activity is?If you're like most people you probably go about your day-to-day business never really thinking about the moment to moment activities that consume your day.I'd like to walk you through an exercise that has helped me and my clients really stay focused on earning their highest possible revenue per hour.